As many as two million seniors in the United States still owe money for student loans, according to a recent report. Since 2005, the total debt owed by people age 60 and older increased from $8 billion to $43 billion. Student loan debt could be interfering with retirement plans of people in Texas. Credit counseling might help baby boomers and others with outstanding loans manage their debt.
Many older people have student loan debt because of money they took out to pay for their children’s education. These people might consider asking their adult children to assist with repayment, especially if the kids are established in their careers. People who took out loans for their own education and still owe money might have other options available. Payments on these balances and other accounts, such as home loans, may benefit from considering the monthly payouts as a fixed cost during retirement.
Someone people might benefit from speaking with their lender to see if he or she would be willing to refinance or restructure the loans. People who have a fixed rate mortgage and are enjoying tax breaks for the interest deductions might wish to take their time repaying the loan. However, those who want to pay off their home might want to increase the size of their payments, which might allow the home to be paid off by retirement and can help avoid excess interest.
Even after exploring all the options, some people might realize that their debt is too great to allow for retirement. In some cases, bankruptcy could help people regain control of their finances. An attorney could explain the different types of bankruptcy and make a recommendation based on an individual’s unique financial situation.
Source: FOX Business, “Boomer Retirees Need a Hand Paying Down Debt”, Casey Dowd, October 09, 2014